US bank JPMorgan lowered Latin America’s growth estimate for 2012 from 3.9% to 3.5% mainly because of the impact of the slower EU and US economies, even when the Latam reduction is less than in other regions of the world.
“We can still say this is a good year for Latin America, but the problem is the tendencies. Compared to last year growth has experienced a significant deceleration” said JP Morgan chief for the region Luis Oganes, during the presentation in New York of Latin America’s economic prospects.
JPMorgan has cut drastically 2012 already poor growth estimates for the Euro zone, down to 0.9% compared to 2% only three months ago while for the US the forecast is 1.2%, while in June it stood at 2.8%.
The drop for Latin America is estimated in 0.4 percentage points and is attributed to the Euro crisis that slower EU and US growth.
This year however all Latin American countries are experiencing an average economic expansion of 4.3% compared to the 6% of 2010, with no single country suffering negative growth.
Argentina is set to expand 7% in 2011 but will drop significantly next year probably, 4.8%. Brazil is set to grow 3.8% in 2012 compared to 3.4% in 2011 and well below the 7.5% of 2010.
“During the previous crisis the slowdown worldwide had an immediate impact on Latin America, but since domestic demand has become the main expansion dynamo, we have at least a cushion”, said Oganes.
However he pointed out that “this does not mean that if we have another world recession, the region will not suffer consequences”.
Oganes underlined that the EU financial sector problems should not have an impact on its Latin American affiliates because “they are working as almost independent entities”, and furthermore the lack of confidence in EU countries such as Spain has seen many investors take their funds to the region.